Tata Technologies Ltd. will reserve a portion of its initial public offering shares for its employees as well as shareholders of parent Tata Motors Ltd.
The portion reserved for Tata Motors shareholders will constitute 10% of the pure offer for sale, according to an addendum to the draft red herring prospectus filed with the Securities and Exchange Board of India. Employees have been allocated 0.5% of the paid-up equity share capital. These shares will be available for allocation on a proportionate basis.
A board resolution to this effect was passed on Sept. 6.
The Tata Technologies IPO, the first from the Tata Group in nearly two decades, will see Tata Motors and others offload as much as 23.6% of the stake. The pure offer-for-sale of 95,708,984 shares by Tata Motors (81,133,706), Alpha TC Holdings Pte (9,176,873) and Tata Capital Growth Fund I (4,858,425) is equivalent to 20%, 2.40%, and 1.20% stakes, respectively.
Tata Motors, at present, owns 74.69% of the company, while Alpha TC Holdings and Tata Capital Growth Fund I have 7.26% and 3.63% stakes, respectively.
The size of the IPO—proceeds of which will go to the selling shareholders—is yet to be disclosed. A recent buyback valued Tata Technologies at Rs 16,080 crore. JM Financial Ltd., BofA Securities, and Citigroup Global Markets India Pvt. are the book-running lead managers for the issue.
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